Planning premises means systemic and logical estimate for the future factors affecting planning.
According to Dr.G.R.Terry ,”planning premise are the assumptions providing a background against which the estimated events affecting the planning will take place”.
Koontz and O’Donnel , “a key part of planning is the establishment of clear planning premises. To assure co-ordination among all managers who make plans in organization , these premises should be used by all concern persons premises guides planning.”
Quantitative premises Premises at the view point of control Types of Planning Premises Premises at the view point of place Premise at the view Point of calculation Internal premises External premises Controllable premises Quantitative Premises. Numerical premises Uncontrollable Premises. Number of factors affecting planning considering the place of the factors, some factors are internal and some are external.
Internal premises of planning : they are as under : 1. premise about basis policies such as should the purchase be centralized or decentralized? Whether to give importance to quality or low price? whether to implement the policy of centralization of power or not? The methods of directing to be followed . Policies and rules of employment – selection , promotion , transfer, demotion and relieve. Premises about automation of office. premises about pricing , price discrimination , after sale services and so on.
B. Premise about capital investment and utilization :a. premises for long term capital b. premises for short term capital 3. Premise about obtaining raw material:1. what type of raw material is needed and in what quantity . 2. what are the sources of raw material . 3. what will be the prices of raw material ? 3. what will be the price of raw material. 4. how much would be the expense of transportation. 5. is there any possibility to prepare required raw material in the company ? 6. if raw material is going to be purchased , should it be imported or indigenously acquired?. 4.Premises about personnel: among all the means of production , the personnel are the only alive one. The premises about this factor can be enumerated as under : 1. how much skilled , unskilled , male, female, workmen, are needed for implementation of a plan? 2. how much training should be imparted in the context of new technological development ? 3. To make an estimate regarding present and future employees. 4. premises about the trend , co-operation, and association of employees. 5. what should be the steps of moving worker ? 6. what is the condition of organization , co-operation and work attitudes of personnel ? 5. Premises about organization : organization is necessary for the implementation of planning . For this following premises are necessary : 1. about type of organization will be required 2. premises about the powers and responsibility. 3. premises about the flexibility in the organization. 4. premises about the co-ordination between the departments. 5. premises about the stability in the organization. 6. Premise about different expenses : Each activity undertakes in a unit leads to expenses, the assumption about them are as under :1. what would be the possible expense oflabout recruitment in the context of rate of labour turnover? 2. what would be the expense of storage and maintenance of materials ? 4. premises about packing and packing expense.5. premises about expense of labour welfare. 6. premises about research and development expenses, 7. premises about empenses of stationey , post telegram , telephone . 8. premises about expenses of selling activities and trade exhibitions . 7. Premises about development the area covered by developmental premises are as under: 1. possibility of present and potential competitors of the unit. 2. Estimate of product development , product enrichment and product enlargement. 3. time span over which the plant will operate at full capacity. 4. Annual return on capital expense incurred. 5. possibility for developing new product. 7. possibility of future development from the point of view of market competition after considering the popularity of a given product. 8. premises about the future development on the bases of government industrial policy. 8. Premises about selling : 1. premise about the quantum of sale, product and sale areas. 2. How much sale should be done on credit and on cash? 3. premises about direct sale and indirect sale. 4. premises about packing, advertisement and after sale service. 5. premises about channel of distribution and expenses for distribution. B. EXTERNAL PREMISES OF PLANNING : Certain external factors like price level, employment , population , technical research, different resources of production, market demand etc. are affecting business activity. Therefore premises regarding these factors are inevitable. These external factors are not under the control of management. So they are uncontrollable premises, which are as under: 1. General premises about business environment. 2. Premises about the production resources. 3. Premises about the demand of the product. 1 . General premises about business environment: a. Premises about price level. b. Premises about the employment. C. Premises about the technical research. d. Premises about the population. e. Premises about productivity. f. Premises about the government policy. g. Premises about government control. h. Premises about the political factors, i. Premises about the social and moral standards. 2. Premises about the production resources :
Premises about location of business.
Premises about the capital.
Premises about the fuel.
Premises about supply of labour.
3. Premises about the demand of the product :
Premises about the demand of the industry.
Premises about the demand of specific area.
Premises about the demand of the firm.
Planning premises at the point of view of control : 1. Controllable premises 2. Uncontrollable premises. 1. Controllable premises : those factors which are internal are mostly controllable. It includes the formation of organization, policy matters, methods of direction , methods of control, types of budget, salary, financial, motivation , promotion , transfer, facility etc. 2. Uncontrollable premises : there os no control on certain premises which are external premises affecting the planning. It includes supply of raw material, manpower, fuel, market competition, government policy, price fluctuation, technical research, government control etc. 1. Numerical premises : the premises which can be measurable by any scale of measurement such as inch, feet meter, liter , kilometer, dozen, gross, tone, etc. is called numerical premise. It is also called physical premises. 2. Invisible premise : these premises are those premises which cannot be measurable in numerical term . Such as group feeling , co-operation, honest , faithfulness, efficiency, effectiveness of advertisement , satisfaction